US HOT STOCKS: King Pharma, Avon Products, Global Payments

U.S. stocks traded lower Tuesday as the Dow Jones Industrial Average fell 76 points to 10935, the S&P 500 dropped 7.4 points to 1158 and the Nasdaq Composite declined 18 points to 2385. Among the companies whose shares are actively trading in the session are King Pharmaceuticals Inc. (KG), Avon Products Inc. (AVP) and Global Payments Inc. (GPN).

Pfizer Inc. (PFE, $17.28, -$0.10, -0.58%) said it will buy King Pharmaceuticals ($14.15, +$4.00, +39.36%) for $3.6 billion, the latest move by a big drug company to swallow up a rival as the industry faces patent-expiration woes. Under the agreement, Pfizer will pay $14.25 a share for King, a 40% premium to Monday's closing price.

Avon Products ($34.86, +$1.70, +5.13%) shares rose amid speculation that the direct seller of beauty products may be a takeover target. The U.K.'s Daily Mail newspaper, citing "whispers," said L'Oreal S.A. (OR.FR) may be making a cash offer of more than $44 a share. L'Oreal declined to comment. Avon officials were unavailable for comment. Avon peer Estee Lauder Cos. (EL, $66.70, +$1.30, +1.99%) also gained.

Global Payments ($37.92, -$4.42, -10.45%) said its fiscal first-quarter earnings fell 15% and its core profit unexpectedly slid despite a moderate revenue climb. The payments processor has struggled as global improvements in its volume and transactions remain slow, while recently its costs of services have risen.

Berkshire Hills Bancorp Inc. (BHLB, $18.09, -$0.69, -3.67%) has agreed to acquire Rome Bancorp Inc. (ROME, $10.30, +$0.81, +8.54%) for about $74 million in cash and stock, as the Massachusetts bank strengthens its presence in New York.

Ciena Corp. (CIEN, $15.10, -$0.44, -2.83%), a network-systems company, said it plans to offer at least $175 million in eight-year convertible notes to institutional investors, seeking to use proceeds to repay shorter-term debt.

Post-secondary educator Corinthian Colleges Inc. (COCO, $6.02, -$0.31, -4.90%) said President and Chief Operating Officer Matt Ouimet will resign at the end of this month to pursue other opportunities. Meanwhile, UBS initiated coverage on the stock with a neutral rating, calling it cheap but too risky, while Citi started Corinthian at hold, as the analysts said they see considerable downside risk.

Stifel Nicolaus cut its stock-investment rating on beverage company Cott Corp. (COT, $7.63, -$0.44, -5.40%) to hold from buy, saying the shares have nearly achieved the 12-month target of $8.50 per share that the firm set in August.

Equipment solutions company CVD Equipment Corp. (CVV, $7.61, +$0.61, +8.71%) said it has received an initial order for $3.4 million from an unnamed solar-panel manufacturer to provide deposition production tools for their solar factory.

Denbury Resources Inc. (DNR, $17.19, -$0.42, -2.39%) has agreed to sell its Haynesville and East Texas natural-gas assets to an unnamed closely held oil-and-gas company for about $217.5 million.

Billionaire investor Carl Icahn and a group of affiliated investment entities reported a 10% stake in Dynegy Inc. (DYN, $4.81, +$0.06, +1.26%) and said Blackstone Group LP's (BX, $13.46, -$0.06, -0.44%) deal to buy the power producer undervalues it.

Interactive Intelligence (ININ, $20.56, +$2.38, +13.09%) projected third-quarter results handily above analysts' estimates as the business communications company benefits from "an increasing number of large transactions."

South Korea's Posco (PKX, $114.81, -$4.69, -3.92%), the world's fourth-biggest steelmaker by output, said Tuesday its third-quarter net profit declined 8.6% and revised down its business targets for this year. However, an expected decline in raw material costs may help it rebound early in 2011.

RightNow Technologies Inc. (RNOW, $22.05, +$1.91, +9.48%) expects third-quarter results to exceed projections as the provider of customer-relationship management software, such as for email and live chat, also said recent hire Wayne Huyard will be president and chief operating officer.

Satcon Technology Corp. (SATC, $3.92, +$0.19, +5.09%), a provider of utility-grade power conversion solutions for the renewable energy market, said its Solstice system has been selected for a 63 megawatt solar plant in Puerto Rico.

Solarfun Power Holdings Co. (SOLF, $12.59, +$0.40, +3.29%), a manufacturer of silicon ingots, wafers and photovoltaic cells and modules in China, said it completed its capacity expansion plan and announced further capacity increases.

A Minnesota bank announced Tuesday it is suing the U.S. Federal Reserve to block new limits on debit-card transaction fees, one of the first lawsuits against a major provision of the Dodd-Frank financial overhaul law. In its complaint, TCB Financial Corp.'s (TCB, $15.20, -$0.73, -4.58%) TCF National Bank argues that the law's prescribed debit card rules are unconstitutional because they will prevent TCF from making a reasonable rate of return on invested capital. The bank, which has $17 billion in assets, also claims that the law discriminates against it because it exempts financial institutions with less than $10 billion in assets.

Touchscreen-technology company Synaptics Inc. (SYNA, $25.48, -$0.35, -1.36%) President and Chief Executive Thomas Tiernan has resigned, effective immediately, citing "personal reasons." Collins Stewart cut its rating on Synaptics to neutral from buy Tuesday, as the firm said it is "deeply concerned that Mr. Tiernan's departure may be performance related."

Verenium Corp. (VRNM, $3.20, +$0.12, +3.90%), industrial enzyme solutions company, said it has licensed a new enzyme for use in the production of edible oil products to the North American operating arm of Bunge Ltd. (BG, $60.38, -$0.93, -1.52%).

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